Simulation Measurement Error

Edward Vytlacil

OLS w/ Measurement Error

No Measurement Error, \(\widehat \beta_1=\) 1

\(\sigma^2_{\nu}=0.25\), \(\widehat \beta_1=\) 0.79

\(\sigma^2_{\nu}=1\), \(\widehat \beta_1=\) 0.49

\(\sigma^2_{\nu}=4\), \(\widehat \beta_1=\) 0.2